William Blair initiated research coverage of Warby Parker, Inc. (WRBY $11.19), an omnichannel retailer of prescription glasses, contact lenses, and sunglasses across the United States and Canada.

Analyst Dylan Carden estimated that the company would generate EBITDA of $51.6 million in 2023 and $68.6 million in 2024, up from $27.2 million in 2022.

“Warby Parker sells prescription glasses, contact lenses, and sunglasses, and offers vision tests and exams,” said Carden. “The company currently commands close to 1% share of the overall U.S. eyecare market, representing just under $600 million in sales in 2022 following four years of annualized growth above 20%, albeit with some volatility, and believes it can capture considerably more share by quadrupling its retail footprint and expanding the breadth of its offering to be more in line with the total market from both an age and category mix standpoint.

“We believe Warby Parker has created a strong and lasting brand in the relatively fragmented eyewear market and that growth for the company will settle in the low-double-digit to midteens range over the next five years,” added Carden. “Both active customers and spend per customer have been strong contributors to growth, favoring new customer growth following retail expansion, which supports total market growth, with an opportunity to go from just above 200 stores to ultimately around 900, supporting a low- to midteens annualized pace at low- to midsingle-digit comps across our forecast horizon. We expect online sales to continue to benefit from retail expansion, though grow more slowly from here given the nature of the product and more infill opportunity.”

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